Clermont is a large scale open cut mine producing high energy thermal coal with relatively low ash. It is fully capitalised and current saleable production is 12 million tonnes per annum, making it Australia’s third largest thermal coal mine.

Through GS Coal Pty Ltd, a jointly controlled entity owned 50:50 by Glencore and Sumitomo, each company will hold a 25.05% effective economic interest in the mine.

When the transaction is complete, Glencore will assume Rio Tinto’s role in relation to operational management and marketing for the Clermont joint venture, and will receive customary management fees.

Glencore head of coal assets Peter Freyberg said the investment epitomises the company’s focus on identifying high quality assets that complement its existing operations and marketing capabilities.

“Clermont is a large scale, low cost, producing mine offering an attractive financial return,” he said.

“As well as being Australia’s third largest thermal coal mine, Clermont is structurally low cost, with its through-cycle profitability underpinned by its low 3.2:1 life-of-mine strip ratio and the ability to bypass 90 per cent of coal without washing.

“Going forward, we will seek to further expand our relationship with Sumitomo where there are mutually beneficial opportunities.”

Clermont has a first quartile margin position in the seaborne thermal coal market and exports primarily through the Dalrymple Bay Coal Terminal. Its JORC reserves as at December 31, 2012 were approximately 172Mt.

Rio Tinto chief financial officer Chris Lynch said: “The sale of Clermont Mine will allow us to realise value for our shareholders as we continue optimising our portfolio. It also demonstrates our focus on strengthening our balance sheet and taking a disciplined approach to allocating capital across the Group.

“Rio Tinto remains committed to a long-term future in central Queensland. Production has recently commenced from the $2 billion extension of the Kestrel mine and studies are currently underway to extend production from the Hail Creek Mine.

“We expect Clermont mine will continue to perform strongly under its new ownership and make an ongoing contribution as a member of the local community. We will maintain high safety and environmental standards at Clermont mine, through the transition period to the new manager.”

With the agreed sale of Clermont mine, Rio Tinto has now announced or completed $2.915 billion of divestments this year. This includes a binding agreement for the sale of its interest in Northparkes and the recently completed sales of Palabora and Eagle.

The acquisition is subject to the terms of the Clermont joint venture documents, under which Mitsubishi Development, J-Power Australia and JCD Australia hold pre-emptive rights.

The parties expect the sale to be finalised during the first quarter of 2014.